What Home Buyers Need to Know for the Week of July 28, 2014
Last week we saw a lot of economic news related to housing and each showed varying results in terms of gauging our economic recovery. The FHFA Home Price Index reported slower growth in May at .40% with year over year growth at 5.90% for home prices serviced by Fannie Mae and Freddie Mac, while Sales of Existing Homes as reported by the National Association of REALTORS® surpassed May’s expectations. New Homes Sales at the same time slumped to their lowest level in three months.
While national home prices continue to rise, they’re it at a slower pace since 2013′s hyper appreciation for average home prices. Sales of previously owned homes reached their highest level in eight months in June. Existing Home Sales surpassed expectations and May’s reading in June, with sales of pre-owned homes at a seasonally adjusted annual rate of 5.04 million units. Analysts forecasted sales of existing homes at 5.00 million against May’s reading of 4.91 million existing homes sold.
New Home Sales didn’t reach their expected volume for June. The reading of 406,000 new homes sold was less than the expected reading of 475,000. Projections were based on the original May reading of 504,000 new homes sold, but revised down to 442,000 new homes sold.
The average rate for a 30-year fixed rate mortgage was unchanged at 4.13 percent with average discount points also unchanged at 0.60 percent according to Freddie Mac’s weekly survey of mortgage rates. The average rate for a 15-year fixed rate mortgage rose by three basis points to 3.26 percent with discount points higher at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage was two basis points higher at 2.99 percent with discount points ten basis points higher at 0.50 percent.
Weekly Jobless Claims were lower than expected, as well as lower than for the prior week. A major consideration for home buyers is good and stable employment. Many employment reports of late suggest that the labor market is expanding. Weekly Jobless Claims continued to trend down with a lower than expected reading of 284,000 new jobless claims filed against expectations of 310,000 claims and the prior week’s reading of 303,000 claims.
Analysts have been pleased with the declining number of new jobless claims and consistent with lower unemployment rates, but cautioned that sustained weekly jobless claims readings lower than 300,000 are more consistent with a national unemployment rate of 5.00 percent or less, so keep an eye on future claims as the recovery moves forward.
What’s Ahead for the Week?
Economic news related to housing this week include Pending Home Sales for June and the Case-Shiller Home Price Index report for May. The Federal Reserve is set to release its Statement after the Federal Open Market Committee (FOMC) meeting that ends on Wednesday. The Bureau of Labor Statistics will also release July’s Non-Farm Payroll Report and the National Unemployment Report at the end of the week.